Annual Performance

Investment Portfolio

The Investment portfolio experienced considerable growth increasing from $4.8 billion in 2015 to finish at $5.0 billion in 2016. Liquidity during the year decreased from $680 million in 2015 to $496 million in 2016. As a result of the declining liquidity, long-term interest rates rose, with the 15 year government bond rate closing at 6.30% compared with 5.49% last year.

The pay-out related to the Tropical Cyclone Winston natural disaster assistance decreased the funds available for investment by $275.5 million. The payout to members was fully met from the cash buffer in the current accounts and did not require any liquidation of investments. Despite the significant out-flow, the Fund was able to achieve growth in the investment portfolio.

Some of the key highlights of the year included:

The Equities portfolio recorded good growth compared with last year. Key investments included:

Additional shares in HFC Bank

Acquisition of 39% shareholding in Fiji Ports Corporation Limited

Additional investments in Momi Bay Resort Limited for the construction of Marriott Hotel

Acquisition of 15% stake in Vision Investments Ltd

Acquisition of shares in Bank South Pacific, PNG

Acquisition of additional shares in Amalgamated Telecom Holdings Ltd.

These new acquisitions complemented the positive movements from listed shares on the South Pacific Stock Exchange and the offshore equity portfolio and contributed $8 million new income in 2016.

Investment in the International Finance Corporation’s (IFC) Emerging Asia Fund (EAF) – during the year, Board approved the investment commitment of US$50 millioninto the IFC EAF.

Investment in Fiji Government’s US bond – the Fund participated in the Fiji Government US denominated bonds float, acquiring over US$60 million in bonds.

Greig Street Re-development - Significant progress on the construction of the project.

Nadi Hotel redevelopment – the project progressed towards the finalization of the design and contract for the project.

Revaluation of Investment properties – FNPF undertook a revaluation of its investment properties, resulting in a net revaluation gain of over $13.8 million.

Reversal of Impairment on Natadola Bay Resort Limited – the Fund undertook an independent valuation of the Intercontinental Golf Resort & Spa, the Natadola Championship Golf Course and the land held by the NBRL for future development that resulted in a write-back of over $11.4 million. The total impairment write-back to date isapproximately $81.8 million.

FNPF continued to explore privatisation opportunities announced by Government in Airports Fiji Limited and Fiji Electricity Authority.